Playtech promises shareholders “certainty and liquidity” from Aristocrat sale

Aristocrat agreed to acquire Playtech last month, in a deal worth £2.7bn (€3.1bn/$3.7bn). However, the deal may still be hijacked after Playtech minority shareholder Gopher Investments submitted a bid of its own.

The document, which was published on 12 November, outlined the main reasons Playtech’s board backed the deal, one of which was Playtech undergoing a “significant transition” to newly regulated markets. The scheme document outlined that this was due to UK market growth slowing and the changing market dynamics in Asia, which meant Asian revenue had declined “significantly” and the UK was no longer Playtech’s main source of revenue.

The considerations also mentioned that Playtech’s shares would be unlikely to trade at the price of Aristocrat’s offer – 680 pence per share – in the near future, particularly considering the amount of time it may take for Playtech’s growth strategy focusing on these markets to be realised.

Given the offer price and the new-market-focused strategy, the supplier’s board said the acquisition would allow Playtech shareholders to “obtain certainty and liquidity for their investment”, rather than waiting for Playtech’s shares to reach 680 pence when these new markets reach maturity.

The document also contained information from Aristocrat regarding how the business integration would affect employment and management of the Playtech business. Aristocrat will conduct a review of Playtech’s business and product verticals, in order to fully understand its capabilities. According to the scheme document, “some operational and administrative restructuring may be required” as the businesses combine but that there would be a limited impact on jobs.

Furthermore, the scheme document outlined that Aristocrat made three rejected advances to Playtech, the third of which saw Playtech offer information about its business instead and instigated a fourth bid, which was then accepted.

The deal, however, remains contingent on the sale of Finalto to Gopher, a detail that could be crucial given Gopher’s own bid.

The $250m (£186.2m/€215.5m) sale of Finalto to Gopher Investments was finalised in September in what Playtech lauded as the “conclusion of an extensive process”.

Finalto was put up for sale in March, and was originally to be sold to a consortium that was led by the Barinboim Group in May in a deal reportedly worth $210m (£148m/€171m). However, shareholders rejected this bid, likely due to the presence of the higher offer from Gopher.

The acquisition would have to be approved in several countries, including Austria, Italy, Spain and Germany, as well as the UK.